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2018 Crypto Exchange Trading Revenue Poised to Double to $4 Billion: Bernstein

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For the most part, the cryptocurrency markets have been operating on all cylinders year-to-date with the exception of one very important metric — price. And now that the bitcoin price appears to have found its footing, today’s slip to $6,410 notwithstanding, that component of the market appears to be cooperating, too. Wall Street research firm Bernstein is acknowledging the industry’s impact, predicting that cryptocurrency exchange revenue may grow more than twofold versus year-ago levels to some $4 billion.

The Bernstein report, as cited in Bloomberg, is entitled: “Crypto Trading — The Next Big Thing Is Here?” The title alone reflects a more open-minded if not sanguine take on the cryptocurrency market, more specifically speculative trading. Last year, leading crypto exchanges generated $1.8 billion in transaction fees, which according to the Sanford analysts is 8% of what Wall Street exchanges made. Based on this metric of transaction fees, cryptocurrency trading was second only to global cash equities.

Courtesy: Bloomberg

The outlook may seem shocking, considering that the bitcoin price is down more than 60% from last year’s peak. But leading cryptocurrency exchange by trading volume Binance, which boasts millions of users, tipped its hand to balance sheet strength. The exchange’s CEO CZ recently provided an outlook, saying the company was on track to deliver record profits this year of as much as $1 billion, as CCN previously reported.  On the low end of its range, Binance is looking at $500 million.

Advantage Goes to Coinbase

Meanwhile, Bernstein analysts are quick to point out that Wall Street banks have largely been on the sidelines of crypto, Goldman Sachs and JPMorgan’s crypto trading and blockchain investments notwithstanding. As a result, the could find themselves in an unusual competitive position where crypto exchanges like Coinbase dominate market share. Coinbase already boasts some “50% of the transaction revenue pool,” according to Bloomberg, and fears of fraud coupled with a murky regulatory climate hold the big banks at bay.

“As the crypto-asset class seasons and institutional demand builds, there are a plethora of opportunities for traditional firms,” according to Bernstein analysts, who then pointed to examples across custody, portfolio management and making markets, for instance.

Indeed, the persistent downturn in the cryptocurrency market, particularly in the bitcoin price, has had observers wondering how crypto exchanges could offset the damage. After all, they generate revenue based on trading volume.

Exchanges like Coinbase have been adding coins, most recently Ethereum Classic (ETC) but they’ve got several more altcoins waiting in the wings that they’re looking to support. While Coinbase officials have stated that these new altcoin additions are in response to trader demand, it’s also a way for them to continue to collect trading revenues while the bitcoin price has been stalled. Binance, meanwhile, whose trading volume hovers at approximately $1.4 billion in the last 24 hours, supports hundreds of altcoins.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 70 rated postsGerelyn has been covering ICOs and the cryptocurrency market since mid-2017. She's also reported on fintech more broadly in addition to asset management, having previously specialized in institutional investing. She owns some BTC and ETH.




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Altcoins

Tron Price Analysis: TRX/USD Must Break and Close Above $0.03000 or be Punished

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  • Tron price is seen trading in the green late on Tuesday, with gains of 2.5% at the time of writing.
  • TRX/USD is still shaping up a potential head and shoulders pattern structure.

The Tron price in the latter part of trading on Tuesday was seen holding gains of 2.5%. The bulls manage to see TRX/USD rising for a second consecutive session. Sellers however are not making things easy, as they continue to cap upside potential.

Daily Chart View

TRX/USD daily chart.

Looking via the daily chart view, a chunky area of supply can be observed running from the $0.02600-$0.02900 price region. This has plagued the bulls since August 2018, as they continue to be dealt a blow by the bears on each occasion. As a freak incident, TRX/USD did manage to force an aggressive spike above this area; however, it was not sustained and failed to close above. Key daily support should be noted at the running ascending trend line. This has been active since 21st December 2018.

Head and Shoulders Still in Play

It is worth considering that a head and shoulders pattern structure can be eyed. Both the left shoulder and head have been constructed. Eyes are currently on the right shoulder, which is still very much in play. The neckline should be noted around $0.023000, and a breach below here could open another fresh wave of hard selling pressure. Support to the downside of this level is not seen until the $0.0175000-$0.016000 range.

60-minute Chart View

TRX/USD 60-minute chart.

In terms of the 60-minute chart, the slowdown in upside momentum can clearly be witnessed. The recent hourly candlesticks demonstrating a loss of power from the bulls most recent run. In terms of this price cooling, it could simple be profit-taking after the decent surge to the north of late. Given the current price cooling, downside hourly support should be noted at; $0.025200 and then $0.023500. These both being ahead of the long running daily ascending trend line.

Upside Target Areas

Should the bulls maintain the current upside momentum, the hopes for the above-mentioned supply zone will be high. A daily breakout and closure above this area really could be the key to greater sustained buying pressure. The market has already witnessed how powerful the TRX/USD bull runs can be once started. As a point of reference, during the most recent rally from mid-December 2018 to the 10th January, the price gained over 180%. This was the biggest string of gains in a trend higher since April 2018, where TRX/USD rose around 240%.

The big level to watch is $0.030000, where the sellers are presently camped. This area being conquered will likely pave the way for a fast move, back towards the $0.040000 territory. The price has not been up at these heights since August 2018, a period when the market had re-entered a strong trend south, dropping a big 50% from the start to mid-August.

Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 112 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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Altcoins

Lisk (LSK) Pushing for Momentum as Marketing Chief Responds to Over-Hyped Claims

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Lisk (LSK) trailed on the edges of Tuesday’s altcoin surge which saw more than a dozen alts increase by between 7% and 40% in value.

One day previously, the project’s head of marketing, Thomas Schouten, took to Reddit to respond to the recent assessment by William Mougayar that Lisk was among multiple blockchain projects which he regarded as ‘over-marketed’.

Mougayar is a venture investor and advisor, and author of The Business Blockchain, which boasts a foreword by Vitalik Buterin. Shouten’s regard for Mougayar’s opinion was such that he felt compelled to respond to the criticism.

Is Lisk Over-Marketed?

As you can see from Mougayar’s graphic, Lisk joins the likes of EOS, Tron and XRP (here referred to as Ripple) in the over-marketed category. Mougayar stated:

“I’ve classified some projects in 3 buckets: Right, Under & Over Marketed. It is based on their own or community-driven activity. I understand some will push back, but this is how I view the market today.”

The tweet followed the author’s post from the previous day titled ‘Marketing Strategies and Practices for Blockchain Projects and Startups’. The post makes a nifty read for those interested in the marketing side of blockchain; why more money doesn’t always breed more success (he’s looking at you, EOS); and the difference between branding and visual identity.

“Over-marketed means the claims are ahead of delivery or being hyped. Under-marketed means the potential of the product is not well messaged into the market.”

Many of the tweet’s 130 comments came from disgruntled coin holders intent on defending their respective projects – in response to which Mougayar added:

“…the classification has nothing to do with the products/services of these companies… I didn’t include all blockchain projects, but selected ones that I was familiar with and that were significant enough to use as a representative sample.”

Lisk Head of Marketing Responds

The response by Lisk’s Thomas Schouten was less hostile than you might expect. He conceded that Lisk had indeed been over-marketed to an extent:

“William’s definition of over-marketed is “claims are ahead of delivery or being hyped”. To a certain degree, I agree with his judgement… I feel that too often our team has predicted progress that could not be delivered in the end. We have learned from this the hard way.”

However, Schouten also pointed out that many of the so-called ‘right-marketed’ projects happened to be exchanges, while most ‘over-marketed’ projects happened to be platforms.

“Coincidence? No. To me, comparing an exchange (for-profit) with a working product and profitable business model, to open-source blockchain platforms in development (non-profit) is comparing apples with pears.”

Lisk Price

While LSK did record 3.3% gains against the dollar, and over 4.4% against BTC on Tuesday, momentum was hard to come by. LSK/BTC on Binance moved from $0.0003368 up to $0.0003518, while the dollar valuation rose from $1.19 to $1.23.

The daily trade volume of $3.6 million was a $400,000 increase from the previous day – not insignificant, but nowhere near the trade influx seen by some of the day’s major movers.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 126 rated postsGreg Thomson is a full-time crypto writer and digital nomad. He eats ICOs for breakfast and bleeds altcoins. Wherever he lays his public key is his home.




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Cryptocurrencies

Can EOS Overcome the Bear Market?

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Since concluding its year-long crowdsale, EOS has quickly emerged as one of the world’s leading cryptocurrencies. This was highlighted not only by its rapid growth during the bear market, but by its ability to attract hundreds of developers and enterprises to its protocol. As the bear market drags on, there are several compelling reasons why EOS could have staying power in an industry facing constant pressure and change. (Note: the author has no investment stake in EOS or its parent company, Block.one).

EOS: A Look at the Benefits

Block.one, the company behind EOS, recently published four reasons why developers are migrating to the EOSIO protocol. They include scalability (15-20 transactions per second), speed (very low latency compared to other blockchains), practically zero fees (eliminates the need for transaction costs) and environmental sustainability (66,000 times more efficient than bitcoin).

Against this backdrop, there are at least 260 projects being built on top of the EOS platform, a strong sign that the Delegated Proof of Stake (DPoS) model was appealing to a wider range of developers. Although the company didn’t elaborate on the types of projects being deployed, the general view among industry is that EOS allows users with very little technical background to leverage blockchain technology.

At the same time, EOS’ strong development capacity has been well documented by industry observers and even government entities. A widely consumed blockchain index developed by the Chinese government has routinely ranked EOS as the world’s top cryptocurrency based on technology, application and innovation. As of December, EOS had once again dominated the ranking with a total index score that was nearly 20 points higher than Ethereum, the second-best cryptocurrency based on the same value metrics.

EOS was designed with scalability in mind. As such, it is a direct competitor to Ethereum, whose shaky position may have pushed developers toward EOS and other protocols. In fact, decentralized application volumes on Tron and EOS have already overtaken Ethereum by a considerable margin. (The author would argue that EOS has a much stronger value proposition than Tron for reasons too numerous to name here.) According to Dapp Radar, the largest Ethereum dapp by volume is ranked 37th, with EOS and Tron accounting for the first 36 spots.

The EOS blockchain is also well funded, with the network paying for development through a maximum 5% inflation. A portion of that is earmarked for block producers but token holders get to decide on how the rest is allocated. Options include burning tokens to reduce overall inflation or allocating funds to pay for popular projects.

A Look at the Risks

While no blockchain project is without risk, EOS faces several unique challenges that have been well documented by the cryptocurrency community. Concerns about voting cartels, block-producer incentives and even regulatory scrutiny have weighed heavily on investor sentiment. Those fears have been exacerbated by the second-longest bear market in crypto history.

EOS creator Dan Larimer has more or less admitted that he botched the protocol’s constitution by giving the network arbitrator too much power. In proposing a new constitution last summer, Larimer said, “I have learned a lot about human nature by watching the disputes, the witch hunts, the ‘bring everything before the ECAF mindset.” ECAF is the EOS Core Arbitration Forum.

The platform recently launched the EOSGO referendum tool, which some analysts speculate may result in constitutional changes. In the meantime, a group of EOS developers have already joined hands to create a new alliance for collaborative decision making. According to the official EOS Alliance website, the group “will be held accountable to the community under the EOS Constitution.”

Read: Spiral of Bad Incentives: EOS Block Producers No Longer In Profit.

EOS has also faced controversy over allegations of irregular block producer voting, which critics say undermine the network’s “free and democratic election process.” Evidence purporting to show voter collusion involving Huobi, a Singapore-based cryptocurrency exchange, and other block producers surfaced last fall, forcing Block.one to take decisive measures to end the so-called voting cartel.

Then there’s the issue of EOS’ original funding mechanism, which managed to raise $4 billion in a highly irregular, year-long crowdsale. EOS may have skirted federal scrutiny during its token sale, but that could change if the U.S. Securities and Exchange Commission (SEC) chooses to re-evaluate the ICO. That’s the view of Charles Hoskinson, founder of Cardano.

Speaking at a press conference in Edinburgh, Scotland in November, Hoskinson predicted that the SEC will bring punitive measures against Block.One for its “egregious” token sale.

Market Update

EOS has not been immune to the bear market inflicting all cryptocurrencies. Despite demonstrating inverse trading patterns during the early stage of the bear market – namely, after the cryptocurrency was launched – EOS has more or less traded in the general direction of its peers.

The EOS price has declined nearly 50% since mid-November. The total cryptocurrency market cap has declined by roughly the same over that period.

At the time of writing, EOS/USD was valued at $2.43, having gained 3.3% compared with Tuesday. At current prices, EOS has a total market cap of $2.2 billion, placing it fourth among active blockchain projects.

Daily trade volumes amounted to $666 million, which is fairly consistent over the past week. Bibox is the largest market for EOS, with trades against Ethereum accounting for 12% of total market volumes.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 743 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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